Arab Today, arab today spain borrowing costs hit euroera record in bank crisis
Last Updated : GMT 22:48:55
Arab Today, arab today
Arab Today, arab today

Spain borrowing costs hit euro-era record in bank crisis

Arab Today, arab today

Arab Today, arab today Spain borrowing costs hit euro-era record in bank crisis

Madrid - AFP

Spanish borrowing costs have soared to a euro-era record high on a market beset by doubts over a vast rescue loan for the country's banks and by fears of a Greek exit from the eurozone. The euro came under more pressure in early trading Wednesday, unconvinced by the deal struck by the 17 eurozone nations over the weekend to extend Spain a banking sector rescue loan of up 100 billion euros ($125 billion). Two major concerns stood out: doubts over Spain's outlook even with the eurozone rescue, and Greek elections on Sunday, which in a worst-case scenario could send Athens back to using the drachma. Adding to Spanish agony, Fitch Ratings on Tuesday downgraded 18 more Spanish banks a day after cutting its ratings on the two biggest banks, Santander and BBVA, despite the massive sector bailout. German Chancellor Angela Merkel, while hailing Spain's request for a banking bailout, stressed it would come with strings attached, as she warned Europe that halting reforms would be "disastrous"."There will of course be conditionality for Spain, when the application comes, namely a restructuring of its own banking system to make it fit for the future," Merkel said in a speech to members of her conservative CDU party in Berlin. It is now impossible to say how things may turn out, warned Edward Hugh, an independent economist based in Barcelona. "This thing is like an express train accelerating towards the buffers in the station," he said. "You have got this cocktail now with the Greek elections coming this weekend and talk of capital controls over Greece, you have got Italy coming back into the line of fire and then you have got this uncertainty about Spain." Spain's benchmark 10-year government bond yield spiked to 6.834 percent, the highest since the creation of the euro, and by late afternoon was at 6.716 percent -- a rate regarded as unsustainable over the longer term. The nation's risk premium -- - the extra rate investors demand to hold its 10-year bonds over their safer German counterparts -- hit 5.43 percentage points, not far from the euro-era record of 5.48 percentage points struck shortly before the banking rescue. Italian Prime Minister Mario Monti insisted that his country will not need a bailout to survive the economic debt crisis. In an interview with German radio, Monti tried to damp down the rumours that Rome is at risk of contagion, calling on the markets and financial observers "not to be governed by cliches or prejudices." However markets also punished Italy, at risk of being the next domino to fall in the eurozone crisis as it struggles to boost growth and confronts a public debt mountain of 1.9 trillion euros. Italy's 10-year government bond yield leapt to a high of 6.301 percent from the previous day's closing level of 6.032 percent. Far from calming the markets, the rescue for Spain exposed a string of new doubts over the impact on the debt; how it will be implemented; and whether it will be just the first rescue for a nation struggling to cut deficits in a period of recession and sky-high unemployment. Spain is expected formally to seek the loan at a eurozone finance ministers' meeting June 21, and a final figure would come after a review by the European Union, European Central Bank and IMF, officials said. A report by Barclays Capital analysts said that a loan of 70-80 billion euros would push up Spain's public debt by 7.0-7.5 percentage points from the end-2011 level of 68.5 percent of economic output. One key concern for bond buyers is whether the eurozone bailout for Spain will tap the incoming bailout fund, the European Stability Mechanism (ESM), whose debt takes priority for repayment over ordinary investors in a time of crisis. Tiny Cyprus added to the gloom. Cyprus Finance Minister Vassos Shiarly told journalists on Monday that his country had an "exceptionally urgent" need for a bailout to recapitalise its banks by June 30, according to The Wall Street Journal. On Tuesday, Moody's ratings agency downgraded two Cyprus banks citing their large exposure to a possible Greek exit from the eurozone, including chopping its rating for Bank of Cyprus by one notch to B2 from B1. The big spectre, however, remains Greece, and the prospect that the anti-austerity party Syriza will win elections on Sunday, rejecting the terms of Athens' international bailout and leading possibly to its departure from the 17-nation single currency bloc. Meanwhile the World Bank on Tuesday warned developing countries to boost their defences against Europe's debt crisis, predicting years of volatility in a flailing global economy.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today spain borrowing costs hit euroera record in bank crisis Arab Today, arab today spain borrowing costs hit euroera record in bank crisis

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today spain borrowing costs hit euroera record in bank crisis Arab Today, arab today spain borrowing costs hit euroera record in bank crisis

 



Arab Today, arab today
Arab Today, arab today Youssra depended on colored foam

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today EasyJet, Lufthansa among seven to bid

GMT 06:49 2017 Tuesday ,17 October

EasyJet, Lufthansa among seven to bid
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Israeli court convicts Palestinians of 2016

GMT 04:39 2017 Tuesday ,17 October

Israeli court convicts Palestinians of 2016
Arab Today, arab today Iran's Facebook shuts down

GMT 23:50 2017 Monday ,16 October

Iran's Facebook shuts down
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Sidem reveals plan to improve education

GMT 15:52 2017 Friday ,06 October

Sidem reveals plan to improve education
Arab Today, arab today British actress becomes fifth woman

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman
Arab Today, arab today Three killed, 360,000 without power

GMT 05:11 2017 Tuesday ,17 October

Three killed, 360,000 without power
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Mercedes says recalls 400,000 UK cars

GMT 06:56 2017 Tuesday ,17 October

Mercedes says recalls 400,000 UK cars
Arab Today, arab today Britain's Vauxhall to cut 400 jobs

GMT 10:53 2017 Sunday ,15 October

Britain's Vauxhall to cut 400 jobs
Arab Today, arab today Anoshka happy for reactions to her talk show

GMT 12:33 2017 Friday ,13 October

Anoshka happy for reactions to her talk show
Arab Today, arab today India to close colonial-era military farms

GMT 18:49 2017 Monday ,16 October

India to close colonial-era military farms

GMT 10:55 2017 Thursday ,12 October

Safaa Sultan happy for “Love School”

GMT 10:37 2017 Thursday ,12 October

Cara Delevingne accuses Weinstein

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha

GMT 12:02 2017 Saturday ,14 October

Conservation cutbacks put Brazil's

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 12:25 2017 Saturday ,14 October

Squeeze on UK health gives advanced

GMT 07:02 2017 Sunday ,15 October

German minister sparks uproar

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 03:59 2017 Sunday ,15 October

US mobile carriers Sprint, T-Mobile to merge

GMT 11:37 2017 Saturday ,12 August

Fashion designer reveals her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday